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Tax

Federal Credits and Opportunities

 

Remaining compliant is a significant challenge for businesses when tax regulations expire, are extended, and get adjusted year after year. Strategic organizations, however, recognize that the federal tax code presents significant opportunities in the form of credits and deductions based on labor, investments, and business operations.

Leveraging Tax Regulations to Benefit Your Company

Our team of tax professionals closely follows changes to the federal tax code and implications of those changes on businesses, organizations, and industries. Your tax function can shift from merely compliance to strategic, proactive performance with our help. Areas we specialize in include:
Employment and Hiring Incentives

Work Opportunity Tax Credit

Many types of businesses in a wide variety of industries can benefit from jobs tax credits for hiring and retaining employees. Created in 1996, the Work Opportunity Tax Credit (WOTC) has been renewed and modified repeatedly for more than a decade and targets specific groups, including veterans. In addition to employment credits, we can also help identify training and development programs that qualify for incentives.
Investment and Real Estate Incentives

Engineering-based cost segregation study

Businesses that own and develop property have long recognized the benefit of depreciation to decrease taxable income. The faster a building can be depreciated, the longer taxes can be deferred. And the higher the present value of those deferrals, the greater the potential savings.

You may be eligible if you have purchased or built a building worth $1 million or more or if you have completed more than $500,000 in property improvements in the past 10 years. Depending on the type and use of a building, the percentage that can be reclassified may be as high as 41%.
Type or use of building Percentage typically classified as shorter-lived property
Office building 23%—32%
Auto dealership 33%—41%
Manufacturing 25%—30%
Hotel/motel 18%—30%
Retail building 20%—30%
Medical building 23%—30%

Other real estate investment opportunities that could benefit your business might include rehabilitation tax credits, low income housing tax credits, and development enterprise zone incentives and deductions.

Research and Development (R&D) Tax Credit

Research and experimentation can generate significant tax credits for businesses. In fact, according to a recent analysis, startups benefit on average $151,000 per claim. Our tax professionals can help you determine whether the R&D tax credit can apply to your situation. Our business advisors are experienced in performing IRS-compliant research and experimentation tax credit studies to help companies maximize their benefits.
  • Preliminary assessment—Our business advisors begin by interviewing your management team to better understand your business and R&D strategy.
  • Engagement—During this phase, our professionals conduct an extensive review of your development efforts, determine which activities qualify for the tax credit, and document these projects. After quantifying the qualified research expenditures, we calculate the tax credit.
  • Future systems—To ensure that you maximize tax credits year after year, our business advisors help your management team set up and maintain systems that will qualify, document, and quantify future research and development activities.
Business Operation Incentives

Section 199 and Domestic Production Activities Deduction (DPAD)

Businesses in the manufacturing industry can benefit from many credit and deduction programs. However, these opportunities follow a complex set of rules and regulations. In addition, like many other federal tax codes, the expiration, renewal, and adjustment of Section 199 and DPAD require experienced professionals to help guide your business.

Utility and Efficiency Programs

In addition to government efficiency programs, many utilities offer tax incentives to businesses that make operational investments to reduce energy consumption.

The EKS&H Advantage

  • Custom federal tax services to your specific business, industry, and structure
  • A long-term relationship based on availability and rapid responsiveness to any and all questions you might have
  • Proactive discussions about business activities to identify ways to reduce tax burden now - and in the future
  • Leaders in the AICPA Tax Sections and Leading Edge Alliance (LEA) North American Tax Group

Talk with Our Service Area Lead

Connect with Lawrence Knutson to discuss your federal credits and opportunities options.

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